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Concern growing US and South Korea could fail to reach an agreement on troop cost-sharing

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A national security crisis is brewing on the Korean Peninsula amid fears the Trump administration and South Korea could fail to reach agreement on a new cost-sharing formula for keeping US troops there, according to several senior US military and defense officials.

If a new agreement is not reached by the beginning of April, as many as 9,000 Korean workers could be furloughed from their jobs on various US military installations, a move that could undermine the US military mission amid tensions with North Korea, top officials say.

The dispute over the cost of the 28,500 US troops stationed on the Korean peninsula erupted after President Donald Trump asked for a 400% increase in South Korea’s contribution under the so-called Special Measures Agreement. The demand outraged Seoul and concerned US lawmakers in both parties.

South Korea currently contributes nearly $1 billion a year, but Trump reportedly wants to increase that to nearly $5 billion a year as part of his effort to get allies to pay more for their own defense, according to administration officials and congressional aides.

With elections looming in South Korea and Trump deep into his own reelection campaign, neither side has much political room to maneuver, dampening expectations a solution will be found soon.

If the standoff continues in the short term, US troops might have to take on the Korean workers’ jobs, potentially undermining US military readiness even as North Korea continues work on its nuclear program. In the long term, there’s concern about damage to a bedrock US alliance in Asia.

“It could happen,” one senior defense official said about the possibility of US troops taking on the jobs, adding there are worries about the impact on the US military and diplomatic relationship with Seoul.

“So 9,000 workers, that’s pretty significant,” Rear Adm. William D. Byrne Jr., vice director of the Joint Staff told reporters at a Pentagon briefing on Wednesday. “We’re going to have to prioritize what services those workers provide. And we’re going to have to prioritize life, health, and safety. There will certainly be an impact to both the service members and their families. Most importantly, we have to focus on the mission.”

The last round of talks between the two countries ended on January 15 in Washington without an agreement or any formal plan to meet again, both South Korean and US officials told CNN.

US has ‘adjusted’ its stance

A senior State Department official said US officials have “adjusted our stance” during the course of six rounds of negotiations, and said they are not currently laser-focused on getting the South Koreans to increase the amount they pay by 400%.

The official would not detail the current ask from US negotiators but said the South Koreans have moved “significantly less” at the negotiating table. The official added that South Korea’s hike of 8% last year “wasn’t the optimal outcome” and the US needs the South Koreans to “go further.”

“We have negotiating room, we’ve got space to move. But it can’t be only us moving,” the State Department official said. “We’ve got to find a place that is responsive to our President’s call for fair burden-sharing and we’re not there yet and the gap is still bigger than I would like it to be.”

If there is no agreement by mid-April, the situation will become even more challenging. South Korean National Assembly elections will take place on April 15. While there could be an agreement in principle reached around the time of the elections, the agreement would not be fully enforceable until it goes to the national assembly.

“It complicates things a lot,” the senior State Department official said of the upcoming elections. “At least up until now they have been trying to get something done before the elections, I think the closer we get the harder it gets.”

The current deal, which boosted South Korea’s contribution from about $800 million to nearly $1 billion, was agreed upon and signed in February last year, more than a month after the previous arrangement expired on December 31, 2018.

While previous agreements had been for five-year terms, last year the US and South Korea negotiated a year-long extension to buy time to reach a longer-term arrangement.

Trump wants allies to pay more

The Trump administration had originally sought to get Seoul to pay some $1.6 billion toward the cost of housing US troops but agreed to the lower $1 billion figure with the understanding that they could negotiate a new arrangement for 2020.

Trump has also consistently argued foreign governments should pay more to support the presence of US troops. In January he boasted that Saudi Arabia had paid $1 billion for the US to house American troops in the Kingdom.

Secretary of State Mike Pompeo and Defense Secretary Mark Esper last month co-authored an op-ed in the Wall Street Journal defending the US position.

“Today South Korea bears no more than one-third of the costs most directly associated with the stationing of U.S. forces on the Korean Peninsula. As these costs rise, South Korea’s share is shrinking. Moreover, these narrowly defined costs are only one part of the picture. America’s contributions to South Korea’s defense in this highly technological age—including some advanced capabilities Seoul still needs to acquire—far exceed the cost of U.S. “boots on the ground” and constitute a far larger burden for the American taxpayer than meets the eye,” they wrote.

They also claimed that paying more money is a good move for South Korea. “As we improve the burden-sharing arrangement, both sides will benefit. More than 90% of South Korea’s cost-sharing contributions currently go right back into the local economy in the form of salaries for South Korean nationals employed by U.S. Forces Korea, construction contracts, and other services purchased locally to sustain an American presence,” they said.

Key Monday meeting

Esper is set to meet Monday in Washington with South Korea’s defense minister Jeong Kyeong-doo to discuss the matter.

“Our forces will adapt. Our focus is going to continue to be on making sure we have our warfighting capabilities,” the Pentagon’s chief spokesman Jonathan Hoffman told reporters on Wednesday.

In Seoul, the head of US forces in Korea, Gen. Robert Abrams, met with the head of the South Korean employees union and cautioned that “allocated funds will be exhausted by March 31, and without an agreed upon Special Measures Agreement, USFK is out of money and must prepare for a potential furlough.”

The previous US commander, retired Gen. Vincent Brooks, warned that if South Korean workers are furloughed, then US troops will have to leave their regular jobs and do critical support work.

He also cautioned that without compromise there could be long term damage to the US relationship with the South Korea.

“There will be significant disruption to daily operations in a foreign country until resolved. Finally, because of the nationalism that is evident in the absence of suitable compromise, the potential for relationship damage within the alliance is more likely,” Brooks told CNN.

This standoff between the US and South Korea comes as the Trump administration and North Korea have also hit a dead end in negotiations.

CNN reported that Trump has told top foreign policy advisors he does not want another summit with leader Kim Jong Un before the presidential election in November. And as diplomacy stands still, North Korea remains focused on its nuclear program.

Pyongyang is “building new missiles, new capabilities, new weapons as fast as anybody on the planet,” Gen. John Hyten, Vice Chairman of the Joint Chiefs of Staff, said last month.

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